ISLAMABAD: A scam worth billions has emerged in withholding tax regime, as huge purchases of goods and services have been carried from “fictitious persons” in a number of cases.
As per details, the director-general (DG) of Internal Audit has written a letter to the member of Inland Revenue regarding scams in withholding tax regime.
“The modus operandi (MO) seems to be that many taxpayers – in order to show reduced profits, pay less tax or claim illegal refunds – falsify purchase orders and bills and show huge purchases of goods and services from bogus and fictitious persons. These withholdees (suppliers) do not file tax returns, and the tax shown as deducted from these is not deposited into the Treasury. Thus, revenue loss is caused in three ways such as withholding agents show the reduced profit, no tax/minimum tax paid by the fictious withholdee (supplier), and non-deposit of withheld amount.
“It is similar to the method of fake invoices in case of sales tax, but the volume is much bigger,” the letter stated.
According to the letter, withholding agents have made dubious purchases of goods and services worth Rs4,193.687 billion in the last five years, on which tax liability of Rs1,258 billion (at an average rate of 30pc income tax) could have been evaded.
“The scrutiny of the data revealed many discrepancies which substantiate the view that these are fake persons and acquisitions being used to show huge purchases of goods and services and thereby reduce the withholding agents’ profit and tax liability.”
The DG suggested that data may be shared with real-time operating systems (RTOs) and they be directed to conduct verification of the existence of the withholders, and to enforce their income tax returns along with payment of minimum tax and sales tax, wherever applicable.
The DG also suggested that RTOs should confirm whether the tax shown as deducted/withheld from these withholders has been deposited in the treasury. If not, legal action under relevant provisions should be taken against them to recover the amount.
He further the FBR IT Wing to put in place in a system to prevent such frauds and malpractices.
Nothing I alone have proveS of billions monthly corruption more than One year eight elapsed Imran Khan did nothing in spite of 30reminder on portal
I alone manage dismissal of Chairman ZTBL and arrest of top Management
But people like me have no respect in Pakistan nor any News papers published
These proves relate to corruption in FBR